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Bronx Judge: State Needs to Clarify KNIC Loan Commitment

LAWYERS FOR THE city and KNIC held court on the sixth floor of Bronx Supreme Court. (Bing)
LAWYERS FOR THE city and KNIC held court on the sixth floor of Bronx Supreme Court.
(Bing)

Attorneys in the Kingsbridge National Ice Center (KNIC) lease case agreed with a judge’s order to have a letter sent to state agencies asking to demonstrate, in writing, that they’re fully committed to a loan needed to jumpstart the massive project.

KNIC’s strongest ally, meantime, may be found on the bench.

“You need to go to the source,” said Judge Ruben Franco, who heard the case involving KNIC developers and the New York City Economic Development Corporation (EDC) at Bronx Supreme Court on May 16. A team of lawyers from the New York City Corporation Counsel, still holding the 99-year lease in escrow, represented EDC.

Monroe College ME (Picture 1)
BRONX SUPREME COURT Judge Ruben Franco. File Photo/David Cruz

Judge Franco ordered the letter be sent to the Empire State Development Corporation (ESD) and the Public Authorities Control Board (PACB) by May 23, with the city drafting the letter and KNIC approving it. Early this year, the state agencies approved a sizable $130 million loan to bankroll the project’s first phase–construction of four of the nine Olympic-size rinks. KNIC has only received $15 million which city lawyers argued doesn’t come close to $138 million. The total cost of the project is $350 million.

Judge Franco ordered KNIC lawyers ask the ESD and PACB to provide a substantial response by June 1. The ESD and the PACB has publicly stated its financial commitment to the project, at one point calling it “transformative,” though no paperwork supporting this claim has surfaced.

The consensus was reached after an hour of open negotiations between both sides. The crux of the case lies in the interpretation of the lease agreement. While KNIC argues it has the financing needed to proceed with the project thanks to the state’s commitment, the city says that a pledge of a loan cannot trigger the release of a lease. Mindy Koenig, senior counsel for commercial and real estate litigation for the city, warned that handing over the keys without funding “doesn’t help the community if the project stops in the middle.”

KNIC lawyers have argued it cannot receive the rest of the loan until the state gets confirmation the lease is out of escrow.

THE LEASE TO the Kingsbridge Armory (pictured) remains in escrow. File Photo
THE LEASE TO the Kingsbridge Armory (pictured) remains in escrow.
File Photo

For months the two sides have been at loggerheads over whether the city should finally give KNIC the 99-year lease that currently remains in escrow.

The suit is now one of four KNIC-related lawsuits currently churning through the system. One suit alleges some EDC employees colluded with former KNIC collaborators to wrest control of the project from KNIC founder Kevin Parker.

Judge Franco, a Bronx resident, did not hold back his support for the project, a sentiment also felt by the Bronx political establishment. But he emphasized it would not cloud his judicial obligation to decide the case fairly. “I want this project moving forward,” said Judge Franco, who said earlier in the proceeding that the “community is hungry for this project.”

At the proceeding, representatives from the Northwest Bronx Community and Clergy Coalition (NWBCCC), which helped draft a bulletproof Community Benefits Agreement (CBA) with KNIC, pleased with Judge Franco’s remarks over reducing any bureaucratic backlog tied to the project.

“We’re not saying that the city shouldn’t have a process, but the end result of that should not be that the project gets scrapped,” said Rev. Raymond Rivera, with NWBCCC and a signatory of the CBA.

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